Correlation Between Putnam Multi and T Rowe
Can any of the company-specific risk be diversified away by investing in both Putnam Multi and T Rowe at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Putnam Multi and T Rowe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Multi Cap Value and T Rowe Price, you can compare the effects of market volatilities on Putnam Multi and T Rowe and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Putnam Multi with a short position of T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Multi and T Rowe.
Diversification Opportunities for Putnam Multi and T Rowe
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Putnam and PAMCX is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Multi Cap Value and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price and Putnam Multi is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Putnam Multi Cap Value are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Putnam Multi i.e., Putnam Multi and T Rowe go up and down completely randomly.
Pair Corralation between Putnam Multi and T Rowe
Assuming the 90 days horizon Putnam Multi Cap Value is expected to generate 1.08 times more return on investment than T Rowe. However, Putnam Multi is 1.08 times more volatile than T Rowe Price. It trades about 0.13 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.07 per unit of risk. If you would invest 1,668 in Putnam Multi Cap Value on September 4, 2024 and sell it today you would earn a total of 722.00 from holding Putnam Multi Cap Value or generate 43.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putnam Multi Cap Value vs. T Rowe Price
Performance |
| Timeline |
| Putnam Multi Cap |
| T Rowe Price |
Putnam Multi and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putnam Multi and T Rowe
The main advantage of trading using opposite Putnam Multi and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Multi position performs unexpectedly, T Rowe can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in T Rowe will offset losses from the drop in T Rowe's long position.| Putnam Multi vs. Ftfa Franklin Templeton Growth | Putnam Multi vs. Qs Growth Fund | Putnam Multi vs. Smallcap Growth Fund | Putnam Multi vs. Small Pany Growth |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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